Introduction

Many multinational organisations need to develop new, much more agile global networks. The first question is why is this the case? The second, and far more challenging question, is how can they do this? We are going to tackle both in this article.

Let’s start with the first question – why do many multinational organisations need to develop much more agile global networks?

The short answer is that there are three main reason reasons for this: 

Pace of innovation and
business change

For many organisations, the pace of business change and the pace at which they are having to innovate is greater than ever before. This is being driven by multiple trends such as the influx of new competitors, rapid digital transformation, the wider impact of technology, desire to expand into new markets, and other key trends. What all of these have in common is the need for organisations to respond extremely quickly to changing market conditions and, to do this, their business has to be flexible and agile. Given that networks are increasingly becoming the critical plumbing for organisations, the connection between business agility and network agility is clear  

Supporting a more
agile IT strategy

Very often the same drivers for faster-paced business change are leading to more agile IT strategies which need to be underpinned by more agile networks. The mass migration to cloud-based application strategies, adoption of new ways of working, and wider digital transformation strategies are all leading to the need to develop very agile IT strategies. As noted above on pace of business change, if an organisation’s IT strategy is becoming more agile, the network needs to be able to keep up

Keeping up with
changing technology

The pace of technology change in the network space has increased at a phenomenal rate. If we look back over the last 20 years and consider the speed of migration from Frame Relay to MPLS, or ISDN to broadband, and then compare this to the speed at which technologies like cloud applications and SD-WAN have entered the market and matured, it is clear that network technology itself is changing rapidly. Organisations therefore have a huge and understandable concern about locking themselves out of future innovations if they don’t adopt a highly agile network strategy 

How to develop, deploy and manage
agile global networks

Having dealt with the question of why organisations need to develop agile global networks, we can now focus on the much more challenging question of how to develop, deploy and manage agile global networks.

To do so, we have to start by looking at where most organisations are starting their journey towards agility (for a deeper dive on this subject, read TNC’s recent article HERE). For most multinationals, their agility journey started with a global network, most likely delivered using MPLS, and most likely delivered by a single global supplier. Back in these days, there weren’t many of these single global suppliers, so the supplier was probably one of five or six of the big names.

In those days, agility also wasn’t top of anyone’s must have list. The driving force was the concept that “we specialise in making widgets, so we should focus on making widgets”, and leave a telecoms company to deliver the network. That model ruled the waves for years and years, but the cracks started to show over recent years.

The main problems organisations started to find with their monolithic global networks was that they were clunky and expensive. Local country IT teams complained that they could buy an internet connection for half the price of the global WAN link, with twice the bandwidth and delivered in a third of the time. Traffic was increasingly heading to the internet but corporate WANs were built on MPLS. Service performance from the global telecoms companies was poor, and as demand for network services rose, and the need for agility increased, these clunky service models simply weren’t up to the job.

As a result, over the last 5 years, we’ve seen an explosion of new approaches. Some companies are throwing away their global WANs altogether and just buying lots of local internet connections. Others are moving to regional WANs from best-of-breed regional operators. Some others are using Systems Integrators to stitch together local services to something more globally unified. Whilst radically different, what all of these models are trying to do is find a balance between cost, performance and complexity.

Put simply, the more local the supplier, the cheaper they can offer connectivity in their specialised geography, and the quicker they can deploy.  For example, a local ISP in Thailand would deliver an internet connection in Bangkok cheaper and quicker than a regional specialist, and the regional specialist would be cheaper and quicker than a global telecoms provider.  However, a single global provider solution is easier to manage, and a network built using lots of local suppliers is much more complex.

The reality is that all of these models have some applicability, so the challenge for each organisation is to find the model that is most aligned to its requirements. In the following table, TNC shows the key characteristics of each model and the organisations to which each is suited.

Network Model Table
Solution Connectivity Connectivity Management CPE Solution Management Agility Cost Performance Complexity
Single global network Single global partner Global IT Dept Single global partner Single global partner Low High Medium Low
Regional network Regional partners Regional or local IT Dept Regional partners Regional partners Medium Medium Medium Medium
Local network Local partners Local IT Dept Local partners Local partners High Low Low High
Centrally controlled, locally managed Global, regional and local partners Global and local IT Depts Single global partner Global IT Dept High Low Medium Medium

As can be seen from this table, the different approaches have significantly different characteristics and therefore will appeal to different organisations. For example, the single global network model is expensive but low complexity so would appeal to an organisation with very centralised models for security and data management, or those with little global IT capability. In both cases, the organisation would have to accept high costs because the more complex models would be unworkable. By contrast, the local network model delivers low costs due to procuring circuits locally, which may be attractive to very cost-conscious organisations, although the costs of managing the increased complexity would have to be considered and offset against the cost savings in circuits.

The model which TNC is seeing emerging in the market is the “centrally controlled, locally managed” model. This approach aims to deliver similar agility to a local network solution, with a similar cost profile, but with improved performance and lower complexity. To achieve this, an organisation would mix local, regional and global connectivity suppliers, using price to determine the most appropriate supplier for each market. This enables greater consolidation of connectivity partners, decreasing the complexity of the network. Equally, using central models for CPE and solution management also simplifies the network and brings central control to the solution, but in a cost effective way.

How can TNC help?

Developing and implementing a new strategy for agile global networks is challenging. There are a profusion of new technologies, service providers, and operating models in the market, and no clear consensus on the best approach.

As always with such high visibility projects, get it right and you will turbocharge your organisation’s digital transformation and support your new agile IT strategy. Get it wrong and your network infrastructure will hold back the rest of your IT and business for the next five years.

However, there is likely to be little choice – agile networks are increasingly a requirement for most multinational organisations so getting it right has to be the priority.

To help customers with the strategic planning and preparation for their new agile global network strategy, TNC has developed a comprehensive tool kit to support you right through your journey, from developing the technology strategy and building the business case, to supporting your procurement process, leading your deployment, and helping you optimise the solution throughout the lifecycle.

If you would like to find out more about how we can help you, we would be delighted to talk to you and share our experience and knowledge.

Disclaimer

Other than matters relating to The Network Collective, this research is based on current public information that we consider reliable. Opinions expressed may change without notice and may differ from views set out in other documents created by The Network Collective. The above information is provided for informational purposes only and without any obligation, whether contractual or otherwise. No warranty or representation is made as to the correctness, completeness and accuracy of the information given or the assessments made.

This research does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice.

No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of The Network Collective Limited © 2021

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